I report on the business of sports for Forbes' SportsMoney group. My sports interests range from baseball and hockey to cricket and Formula One, though I specialize mainly in college football and basketball. Studying sports business interests me both as a writer and a sports fan, and I've found that digging through financial reports is often just as enjoyable as combing a box score. Reach me at csmith@forbes.com and follow me on Twitter @ChrisSmith813.

Say Your Goodbyes: The ACC's Days Are Numbered

Things were looking up for the ACC as recently as a few weeks ago. The conference had poached Pittsburgh and Syracuse from the Big East, which in turn helped it land a new TV deal with ESPN that guarantees each conference member an additional $4 million per year. But ACC Commissioner John Swofford’s empire has come under siege before he could even finish patting himself on the back. Rumors of realignment refuse to subside while new television contracts and playoff plans pose long-term threats to the conference. At this point, it looks like Swofford will be lucky if the ACC is still considered a top conference in two years.

The most publicized threat to the ACC’s stability has been one of its own members, Florida State. The trouble began with rumors that Florida State was looking into moving to the Big 12 in order to cash in on the conference’s new 13-year, $2.6 billion TV deal. The Big 12′s TV contract grants conference members third tier TV rights, unlike the ACC’s deal with ESPN, and it annually pays about $3 million more per school. Sources at the school strongly denied the rumors of impending conference realignment, but that was before Andy Haggard, Chairman of the school’s Board of Trustees, blasted the ACC’s new TV deal. Haggard decried that the conference gave up too much in the agreement, and he suggested that FSU’s Board of Trustees was willing to consider a conference change. Seminoles head football coach Jimbo Fisher reiterated the message, saying that Florida State should explore possible realignment options.

Florida State’s president, Eric Barron, finally came out with his official stance on the subject. Barron’s list of pros and cons suggests that the school should stay in the ACC, but he concludes his memo by saying:

We can’t afford to have conference affiliation be governed by emotion — it has to be based on a careful assessment of athletics, finances and academics. I assure you that every aspect of conference affiliation will be looked at by this institution, but it must be a reasoned decision.

The conclusion is far from a commitment to the ACC, and Barron’s concerns are not nearly as problematic as he phrases them. He twice notes that the Big 12′s new TV deal isn’t officially signed, though that really ought to suggest that the contract’s total value could increase further with the addition of Florida State. Barron is also worried about increased travel costs, but Baylor, TCU and West Virginia are all closer to Tallahassee than either Pittsburgh or Syracuse. Plus the Big 12 would likely absorb an additional ACC team along with Florida State, adding another geographically close conference member.

That second ACC school also adds another layer of problems for the doomed conference.

Losing two schools would be a blow to the ACC, but the departure of any of the above listed would be particularly damaging. If the ACC loses Georgia Tech, it loses Atlanta, the ninth-largest media market in the country. If Miami leaves with FSU, then the ACC would no longer have a school in Florida. Finally, Clemson and Virginia Tech are essentially the only schools in addition to Florida State that have a real chance of reaching a BCS bowl in the near future. Had either of them not been in the ACC last season – Clemson and Virginia Tech went to the Orange Bowl and Sugar Bowl, respectively – the conference would have missed out on about $5 million in post-season revenue.

Simply put, the ACC cannot afford to lose two of its premier football schools. Some fans may point to the conference’s wealth of basketball powers like Duke, North Carolina and Syracuse, but college basketball alone is not enough. Just look at the Big East. The conference relied on basketball programs at Connecticut, Louisville and Syracuse to generate NCAA tournament payouts and TV dollars. And while the three schools have been nothing short of spectacular, with Louisville ascending to the throne of college basketball’s most valuable team, the conference is quickly collapsing. Pittsburgh, Syracuse and West Virginia have recently fled the Big East, and Louisville has announced that it wants out. The reason is that conferences cannot keep up financially without a core of competitive football programs able to drive up television revenue.

But even if the ACC convinces its top football schools to stick around for another year, the conference has little hope of keeping them there for the long-term.

As mentioned above, the ACC’s renegotiated contract includes third tier rights, which means that member schools’ TV revenue is mostly limited to the $240 million that ESPN annually pays the conference. Big 12 schools, on the other hand, make more per school than ACC members – $20 million to $17 million – and still control their third tier rights. Those third tier rights can be very valuable; Texas collects about $15 million annually from the Longhorn Network. Similarly, the Big Ten packages third tier games on the Big Ten Network, which has nearly matched the annual payouts of the conference’s national TV network deals. The ACC sold its third tier rights to ESPN, but the conference’s schools still get out-earned by those in every major conference except the SEC (and that claim will not be valid for long as the conference is renegotiating its TV rights fees to an estimated $25 million per school annually).

Perhaps even more importantly, the ACC might be on the outside looking in after the BCS implements its new playoff system in 2014. It’s unclear at this point how the current bowls will be worked into the system, but their current conference affiliations should be worrying for the ACC. The Big Ten and Pac-12 want to preserve the Rose Bowl, while the Big 12 and SEC recently agreed to a new inter-conference championship plan for when the playoff system is implemented. Those two games match up well with the four-team playoff, suggesting that the four conferences have an inside track on the future of college football’s postseason.

Fans of the ACC don’t need to worry about the conference disappearing entirely anytime soon – just look at how long the Big East’s death rattle has lasted – but they may want to keep an eye on this week’s Big 12 meetings. The ACC’s run as a top conference is quickly ending, and the Big 12 is more than capable of dealing a fatal blow.

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Chris, it certainly appears that what you are writing is accurate. I commented on the last article a few weeks ago on how bad the new TV deal really was for the ACC. It appears to me that you are absolutely correct, that the Atlantic Coast Conference is a dead man walking. The only real question is one of timing.

Clemson, Florida State, Miami, Georgia Tech and Virginia Tech would be insane not to jump into the Big 12 or SEC quickly. Florida State probably has the most to offer a superconference, followed by Clemson and Miami. For some reason, Florida State is still a great television draw, even though their product has been suspect. THey’ve almost gotten to the point of Notre Dame. They can play poorly, yet people want to watch them.

Miami has been plagued by financial problems for years now, and has the most to lose by staying put.

The real story here is how horribly Commissioner Swofford has led the conference. In the late 1990s, the ACC was the premier sports conference in the country. Today, it is probably the 5th best followed by the Big East. How ACC schools have allowed this to happen is a great mystery.

“Finally, Clemson and Virginia Tech are essentially the only schools in addition to Florida State that have a real chance of reaching a BCS bowl in the near future.”

I would start there.

That is an insane statement. GT was in a BCS bowl 2 years ago. While VT will be favored, I think the opening game between the Techs will decide the winner of the division yet again. That winner has at least a 50% chance of winning the ACCCG. I would give GT at least a 15-20% chance of making a BCS game in 2012 alone.

And your tier 3 comments are wrong too. They sound like straight out of the WVU propaganda that have been occurring on all the sports boards.

Additionally, The ACC only signed over their Tier 3 tv rights, which means one football game a year, the worst one on the schedule(think FCS opponent), and a hand full of basketball games that the tier one and tier two rights owners didn’t want. These games, contrary to what’s being floated on the interwebs are not extremely valuable. Tier 3 also consists of radio broadcasts, signage, coaches shows, etc. These properties are valuable, and are still retained by the individual ACC teams. So the tier 3 argument is flawed.

Also, not only is Texas not getting $15 million a year, no one wants the channel. Texas had to pay the Fox not to broadcast a big 12 game, just to try drum up interest. And this is Texas, arguably the biggest CFB football brand in the nation. Those big money tier 3 deals just aren’t going to be coming, anymore

For one, “Say Your Goodbyes: The ACC’s Days Are Numbered” is, at best, a hyperbolic headline and, at worst, clearly untrue.

Your Clemson quote takes any nuance out of the statement from the University, which (pardon my bias as a Clemson graduate) was presented as a rather bland sort of “anyone should be willing to listen – but it doesn’t mean were going to take another conference up on an offer but, sure, we’ll listen.” For that matter, Clemson isn’t going to increase the value of the Big 12 TV contract much more than WVU did – I don’t see them as an appealing addition to a conference that needs to increase the average payout per team.

More importantly, you seemed to completely miss the distinction between “Tier 3″ and “other than Tier 1 & 2.” The Chicago Trib had a very good piece on this. N.C. State, for instance, has a contract earning the school $4.9 million/year on distribution other than Tier 1 & 2 rights. Coaches shows, etc. $4.9 million is pretty good for “no Tier 3 rights,” as it were.

Also, over the weekend there was coverage of the SEC’s TV contract negotiation and, because of the adherence to an 8-game conference schedule, the SEC is having difficult negotiating up from the $17 million per/per where they already are – that’s $8 million shy of your $25 million estimate. (Chicken & egg, but that is presumably why the teams seem to want to have 7 or 8 home games/year – to generate revenues that offset the shortfalls.) It does remain to be seen as to what the Big 12 will get out of a new contract.

Also, given the way that VT was squeezed into the conference, I doubt that the Commonwealth will allow UVA to now be left high-and-dry. You have to note that when speculating about VT.

The ACC has 12-teams and has not lost one in more than 40 years (the same sure can’t be said of the Big 12, which has lost a third of its conference in two years and replaced two teams with a non-AQ TCU program that adds no television market & a WVU program desperate to get out of a crumbling Big East, but also bringing little of an audience and creating lots of unpleasant road-trips). Even if FSU and another team (NCSU?) leave, two new schools of academic and athletic prestige are joining the conference. If the conference really wants to expand to 14-teams, Connecticut and Rutgers are begging to get in.

i will set back and laugh my rear off when teams start fleaing the acc.. i will love it,,,, the acc has not be an important part of the BCS in years, and without fsu and clemson, you bty, have secretly talked to the big 12, the acc is a laugher,,, pitt, syracuse ,football powers”"”"‘ lol,,,,, neither team has been revelant in years and years,, they just add to the fact that the acc is a BB school, and we all know BB doesn’t pay the bills and without your tier three rights, and you don’t have them, you new tv contract does not come close to the major conferences,,, you notice , i said major…. as you are not.

Thanks for the comment, Dave. You’re right that if both were absent that another ACC school would have been placed in the Orange Bowl, but my argument is that if only one had not been an ACC member then the conference would likely have lost representation in the Sugar Bowl.

Chris, maybe you really do believe what you imply? You are implying that the 3rd tier rights of leftover football and basketball games are worth 15-20 million dollars a year? Just think about that for a second compared to what networks are paying 1st selection rights. It doesn’t make any sense because it’s ludicrous. Your profile says you report on the business of sports. This is one of the worst representations of sports business that I’ve read. Did you get it from a message board? What are media rights? How is it that West Virginia is trying to sell their media rights for about 5 million a year including those precious 3rd selection football and basketball games. That’s exactly what NC State sells theirs for and they are an ACC school minus the 3rd selection football and basketball games. That should clue you in to how much those offerings are worth. How much is the Big12 TV contract worth now? When does the new contract start? How does the present value of money affect the future Big12 contract numbers? How much of those media rights are included in the PAC12 numbers? Which ones are they? Look into some of the questions I asked and maybe you could write in the WSJ. Really, Forbes, I need to reevaluate everything I read from you now.